stay tuned. facebook's earnings. the great julian robert son. find out what he's investing in right now. that's coming up on the second hour of the "closing bell." i'll see you tomorrow. it is 4:00 on wall street. do you know where your money is? i'm maria bartiromo. the dow plunging better than 200 points. a second time in three sessions. we saw a 200-plus point decline on disappointing earnings. the market finishing down 242 points. the low was 262. take a look at how we're settling out today with the industrial average now at 13,103 with a decline of nearly 2%. nasdaq gave up 26 points. that was nearly 1%. the s&p 500 tonight down 20 points, about 1.5%, at 1413. we're moments away from earnings out of facebook, the story of the year.

maybe it's actually apple. netflix also coming out with earnings. first, what a day it was for markets. let's get right to the action and what this may mean for tomorrow and the next day and the next month and year. bob, let me kick this off with you. what did you see in the market today? >> i think the important thing is the market disappointed the greatest number of people today. they were anticipating we would actually rally going into the close like we did yesterday. there were people anticipating we would fall apart and be down 400 points. we simply went to near the lows for the early part of the morning and stayed there. we stayed in a fairly narrow trading range all day. i think it was a real disappointment to a lot of people p. >> eric, when you see a market like this down 250 points on the session, as the chief investment strategist, what do you want to do? buy into it or sell? >> we're investors not traders. we think there's good value in equities over kind of a year

horizon. we're in a soft part of the economy right now. we have the fiscal cliff. i think this is really very much an impact of the fiscal cliff and the concern over what that does to our economic growth rate. if we grow at 2% over the next year like we expect, then we're going to think equities are good value. if we don't grow at 2% because of the fiscal cliff, then equities aren't going to be good value. >> so you think is more related to the election and fiscal cliff than it is to earnings? >> more specifically to the fiscal cliff because right now the mediocrity -- i mean, analysts dramatically lowered expectations. i don't think you need anymore data to tell you that growth economically in the world is actually very anemic. china's probably will begin to hook up, but the u.s., if it goes over the fiscal cliff, goes into recession. that's driving volatility for the whole quarter. >> everybody is saying we'll go into recession if we go off the cliff. brian, where are you on that same question? do you want to buy or sell? do you think it continues? >> this is actually towards the

lower end of our trading range for the balance of the year. around 1400, that's the low point. maybe we could test down 1371 if we continue to get bad earnings. i don't think this is related to the fiscal live cliff at all. if it was, last night president obama indicated there's no way we're going to go over that, he's not going to let the spending cuts happen. what about the tax increases? the day's numbers i think was more a function of the fundamentals, bad earnings, specifically top-line revenue growth was really slow. >> but how is he going to stop the spending cuts? i didn't understand that from the debate last night. how is he going to stop the spending cuts from going through when that's the law? which, by the way, he signed. it'sautomatic. how does he stop that? >> they would have to craft a deal in order to have it paid for. one of the ways is to allow the payroll tax cut to expire and also to perhaps phase out the extended and emergency unemployment insurance benefits.

that would provide enough revenue saved in order to offset any of the sequester. so it's pretty easy to do the math in order to avoid the cuts, but it's still going to be painful. if you think about what that might mean for consumer spending going forward if you're a typical worker who all the sudden faces $1,000 or more per year in taxes. i don't think that bodes all that well for consumer discretionary. >> no, and it doesn't bode well for 2013. peter, what about you? are you putting money into this selloff, finding value? do you want to sell into it knowing that it will continue? >> well, first off, i give quarterly earnings so far about a c-plus of a grade. i think it's related to everything that your prior speakers have mentioned. fiscal cliff, earnings results, the european situation. it's all coming home to roost. i'm really not that surprised. i think it's a little bit late in timing. we all knew this was going to be happening. so given that, i think it still

is -- it might sound trite, but it is a buying opportunity for select stocks that you've been following that, you think are domestically dependent just on u.s. revenues and their balance sheets are in good shape. we've had a tremendous amount of cash on the sidelines, but that is becoming even more emphasized recently. you've got everything set for a rally. we're not exactly sure when that will happen, but when it does, i think we want to be in the game rather than on those sidelines. >> in today's action, maria, it was largely about the new information. the new information is revenue growth isn't what people were anticipating. earnings weren't so bad. flat is what was expected. revenue growth is a disappointment. as proof of this, look what happened at 6:00 a.m. dupont came out with the stunningly disappointing commentary and poor revenue growth and the futures dropped eight points at 6:00 in the morning.

that was the disappointment on the revenues. that's what the market is reacting to today. >> yeah, i don't know why it's new information. i feel like this was so choreographed and sort of out there. we heard from a handful of customers. $1.26 billion is the revenue on facebook, by the way. just getting these numbers right now. the expectation was $1.23 billion. the numbers are actually $1.26 billion. on 12 cents a share. versus an estimate of 11 cents a share. the facebook numbers are out. we've been waiting for this report, given the stock has been losing value all year since is went public. in fact, since the last earnings report, that's just july 26th, the stock is down 27%. so we're talking about a 50% decline since going public in market value. the numbers are better than expected, though. 12 cents a share on revenue of $1.26 billion. thanks, everybody.

we appreciate it. your commentary on the broader markets. let's get into facebook for a moment. rick summer of morning star is with me right now. thanks for joining us. >> sure thing. >> the numbers are out. what's your initial take? we want to look behind the numbers, of course. looking at these right out of the gate, 12 cents on $1.26 billion, what does this tell us about facebook? >> it says we still haven't seen yet, haven't been able to see the monthly and daily numbers yet. looking at top line, it bodes well, looks like we're still seeing stable to good growth. the real question remains when we see that reacceleration. this is a good, solid quarter here, particularly in the face of probably a weaker payments quarter. >> weaker payments quarter. we want to know exactly what was behind this because it does look better than expected. julia boorstin has more on the quarter that we are just learning about, even though the stock is down 4%. what can you tell us right now? stay with me, rick. i want to get your take on what's going on in terms of the headlines behind these actual

numbers. julia. >> maria, just going through the earnings here. the earnings look like they're a penny better than expected. 12 cents per share. looking at the operating margin, the non-gap operating margin is coming in at 42%. that's down from 51% in the year earlier quarter. one thing i know analysts have been focused on is the advertising business. revenue from advertising was $1.09 billion. that represented 86% of total revenue and also a 36% increase from the same quarter last year, excludeing foreign exchange rates. advertising revenue would have been up by 43%. looking back at q-2, at the prior quarter, advertising in q-2 only increased 28% over a year earlier. so it actually looks like facebook is starting to accelerate that advertising revenue growth again, which is very important for the company. now, on the other hand, while advertising growth is reaccelerating, the payments growth is really stagnating. payments grew only 13% over a

year ago and actually declined at 9% sequentially. that largely is probably because of zynga and other games generating less revenue. that really does show that's part of the business facebook does need to work on. so just continuing to dig through the report here. seems like the margins continue to suffer. back over to you. >> all right. thanks a lot. 3% decline. rick, we've been waiting to see if they were going to figure out the mobility part of this story. that's where, really, the underperformance has been. we saw google's ad sales grow at the slowest pace last quarter. are we seeing a slowdown at facebook as well? >> so quite the contrary, as we really should see reacceleration. i think that the big question that we have that remains is how much cannibalization do we get as we shift from desk top to mobile? i think we're all going to be paying close attention to that conference call today to get much more clarity in terms of how that mobile business is doing. clearly they have in ad products

that have just launched. we still should see that there has been uplift and better performance in that segment today. >> what would you want to do in terms of facebook management? what would you want to ask when they talk to investors? what are your issues? >> i think that, you know, first and foremost, we really look at this as a demand side issue, meaning agencies and advertisers, to continue to be able to push out inventory and provide inventory for them. secondly is looking at mobile and understanding how much mobile they're able to monetize. you certainly look at revenue per user on the mobile side. you have a half billion mobile users. understanding if that users are increasing and they're able to turn that into more revenue. that's a different trends that we're seeing perhaps from other companies in terms of mobility. >> and in terms of the stock right here, it's lost so much of its value i understand going public, better than 50%. what do you think is next for

the shares? i mean, would this be an entry point? what can you tell us in terms of this decline in market value? >> yeah, so one of the things we've talked about is right at this $19 range is a very strong watch list candidate depending on your risk profile. you still have a couple very, very meaningful expirations of lockups that are going to occur over the course of the next couple of months. i think we need to get those behind us before it gets very attractive at these levels. we have a $32 fair valuen to. anything south of 19 looks very attractive to us from a risk return profile perspective. >> all right. we'll leave it there. thanks for joining us. want to get to brian with more on netflix stocks. revenue was $905 million. looks like it was in line with estimates. >> that's right. we only have the gap number right now. it was 13 cents. the nongap number we do not have. the stock getting whacked, down 12.5%.

it's off the lows. when we get that nongap number, we'll let you know. it's not selling off on revenue. it's something else. >> all right, brian. we'll come back to you. thank you so much. more now on facebook. the company, as i mentioned earlier, releasing earnings of 12 cents a share on revenue of $1.26 billion. let's get back to julia. she has more. >> maria, just want to bring you more on that mobile number. obviously that's a huge area for facebook's growth. facebook revealing that 14% of its advertising revenue during the quarter is coming from mobile. so 14% of facebook's ad revenue is mobile. that's a huge difference. back in q-2, 0% of the ad revenue was mobile. this is a huge transformation. this is largely -- i would guess this is the reason facebook's advertising is reaccelerating. back to you. >> all right. we'll keep checking back in on facebook. what a day. don't go away. we have a lot more on the market

selloff today. coming up, measuring the markets. is today's drop actually a buying opportunity or a sign of more pain to come? plus, painting the picture. fast reaction and analysis to a litany of earnings still to come. plus, what they say about where we go from here. and maria means business. >> third quarter profits to fall 1.9%, which would be the weakest earnings picture since the second quarter of 2009. >> she called this disappointing earnings season weeks ago. what does she think now? the answer is ahead on the "closing bell."

welcome back. want to get back to julia boorstin on these late breaking stories. we have the facebook earnings. we have another story on sirius. >> yes, this is news on sirius xm radio. the ceo will be leaving on february 1st, 2013, when his employment agreement expires. he will also be leaving his position on the board. the press release saying that the board of directors has formed a search committee to find someone to replace him.

the stock, obviously, falling here after hours on this news. in his time at sirius xm, it's grown to be the largest radio station in the world. back over to you. >> all right. thanks so much, julia. for those of you just catching up with us today, it was a rough day for the market. the dow posting the second 200-plus point drop in three days. are we poised for more losses, or is this a trading and buying opportunity with this market down 243 point? david and michael are both with me. good to see you guys. thank you very much for joining us. michael, let me kick this off for you since you were predicting a tough period for the marks. what's behind it, and how much

longer does it endure? >> i don't think this has anything to do with earnings. if it did, then the 30-year treasury yield would not have dropped. the deteriorations i've been referencing would not have started after qe-3. this is the market wondering if easing is enough from the fed. as far as the length of time, it could spill over into november. i think you have to have some kind of a flush, let's call it, to get rid of all these, what i call, nuvo bulls who have been trying to chase the market up, missing the june low, and thinking all is well because of this bernanke put concept. >> why now then? if you say it's about the fed and about the other issues, some people saying it's the fiscal cliff, why now? what's the catalyst to sell off last couple of days? >> well, i do think the fiscal cliff does have something to do with it. we have this push and pull here where qe-3 is in play, but the fiscal cliff can still occur, especially it seems, if obama wins the elections. so every day that goes by, we get closer and closer to this, you know, dead heat here between fiscal and monetary action,

positive on the monetary side and anythingtive on the nis call side. >> david, you think this is a buying opportunity. >> i do. i think the fed is still in monetary overdrive. if you look at the real level of short-term interest rates and how much money they continue to put into the economic system. and the median stock is about 9% off its 52-week high, yet, it's still trading an attractive valuation. for all the talk about revenue growth, if you look at the possibilities in the tech related consumer area thanks to mortgage refinancing, higher housing values, lower gas prices, the wealth effect of a 15% increase in stock prices this year, revenue growth, i think in those areas, consumer an consumer related tech, will be just fine with the average stock nearly 10% off its 52-week high. you can find controversial names like google, which is about 13%

off its 52-week high, but i think we'll grow revenues in a mobile application area. there are more opportunities today than three days ago. >> what about facebook? company reported earnings tonight. anything there you like? >> i always want to talk about companies that my traders are okay with in advance. >> i understand. >> on the tech side, i think google is a better play at this point in time given where it's able to grow revenues. >> are you not concerned with the slowdown we're seeing in earnings, particularly within technology? >> absolutely, in the near term. i am. that particular guidance is much more sobering in a low expectation environment that prevailed a couple weeks ago. however, as you look forward into 2013, the year over year comparisons become easier. you've got the potential, i believe, for a 7% to 8% earnings

growth next year. as you and i have talked about before, 20% dividend growth and cash flow growth that is still likely to surprise us on the high side. >> all right. >> a quick note about technology. the entire outperformer of the year has undone the last two or three weeks. this is about momentum ending. >> you don't think it's a fact the revenue was light at ibm and intel and microsoft? >> sorry, maria. >> it's there, but the valuations are still there in tech. >> all right. we'll leave it there. gentlemen, thank you very much. appreciate your time tonight. see you soon. hold on to your hats. we have the latest on a big reversal in facebook shares in the after hour trading. we'll take you through the onslaught and what it means for your money. then later -- >> for the last three months, investors have been ignoring the weak economic backdrop and instudy plowing money into stocks because of the cheap money swirling from the central banks around the world.

qe-forever comes to mind. >> this program has been sounding a warning about weaker earnings for a while now. we look next at the batch of results after this short break. then, the billionaire founder of one of the world's biggest hedge funds sits down with me for an interview you'll only see on this network. find out what julian robertson thinks about these markets, the fiscal cliff, and where he's allocating money today. back in a moment. when you take a closer look... ...at the best schools in the world... ...you see they all have something very interesting in common.

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fast and furious since the close of trading tonight. that close was also fast and furious and pretty significant. let's find out what tomorrow looks like. brian rounds up all after hours action to tell us where the movers are. >> a quick look at facebook. obviously want to update the price movement. it started off negative. it's traded pretty strongly to the up side. up now almost 8%. we have to wait for the call. advertising stronger than expected. cash flow is good. margins were very, very good. so maybe that's turning things around a bit. opposite for netflix. reported negative cash flow, and they see a q-4 loss that's down 15%. buffalo wild wings also selling off sharply. we have a miss on the top and bottom line, down almost 11%. amgen, see how that's trading. up 0.75%.

gilead, pretty decent. not a whole lot of movement there. finally, vm wear reported as well. decent numbers, up 1%. back to you, maria. >> all right, brian. thank you so much. big movers in the extended hours. what do the earnings tea leaves tell us about the direction of the broader market? ron and herb read those tea leaves for us. we have about 25% of companies reporting earnings so far. 60% are beating expectations, guys. i mean, 25%, a quarter of all of the earnings are out. does this really tell us the full picture of what's going on out there, or are we jumping the gun here by thinking that everything has sort of, you know, fallen apart with earnings, herb? >> oh, i think we now know from what we're seeing companies reporting that things are more tepid than people expected. you just see it. by the way, i don't pay attention as much to the issue of whether they're meeting or beating on this because those are numbers that can be, you know, made up or whatever. but i really think right now when you look at the earnings, and i've been going through company after company after

company, you know, you're seeing there's real pressure. the pressure is not in this country. >> i would agree with herb entirely on that. most of the misses are coming from actions overseas or from currency adjustments. i think the market's going to correct. i've been saying for three weeks we should look for anything from a 3% to 10% correction. it's going to be a particularly choppy environment, especially going into earnings season, the election. the earnings misses are really the result of weakness in europe and china as opposed to domestic weakness. i haven't seen too many cities where action isn't vibrant. >> and in terms of the u.s., i mean, you've been saying for a long time that you think the u.s. economy is better off than people think. what are you seeing in terms of the u.s., ron? >> that's kpak lexactly what i . i was in boston about a week and a half ago. it was hopping. you go to new york city, san francisco, florida, you go around the country, restaurants are full. you walk into a starbucks, that stock is down, yet here in the u.s., it's always busy. the same for mcdonald's.

i think some of these stocks actually are getting quite cheap and interesting from a domestic perspecti perspective. the wild card still seems to be overseas. >> maria, they keep talking global, global. when i look at some of those companies -- in fact, this morning i was tweeting it out. some companies talking more ambitiously about their u.s. business. you have chicago bridge come out this afternoon. they were talking about their business in the u.s. being okay. >> well, that's the thing. i think corporates today are, you know, healthier and more lean and mean than they've ever been. frankly, i think the corporate sector is very well positioned. the problem is they're sitting on their cash because of the unstiu uncertainties, and are looking at a slower demand picture outside of the united states. that's what we're seeing in these earnings. but when things turn, the corporate sector in america should certainly be poised to do very well, given their positioning with cash on balance sheets.

guys, thank you. see you later. ron, herb, thanks very much. hedge fund pioneer julian robertson putting his millions where his mouth. i should say billions. leading a vanguard of wealthy owners to a super pac supporting mitt romney. we'll talk about mitt romney's prospects for victory, what that could mean for the market, and where he's putting money right now. up next, ex-goldman sachs banker greg smith hoping his new book will catapult to the best sellers book. he'll sit down with me after the break about what's in that book. [ male announcer ] this is steve.

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welcome back. first, greg smith sent this fiery resignation letter to goldman sachs that was published as a "new york times" op-ed. that raised the curiosity of outsiders about the secret nature of the bank. people leave goldman all the time but rarely talk about it. smith accused the firm of putting its own profiteering ahead of the customers. greg smith, the former vice president and 12-year veteran at goldman sachs, now has a new book out. it's entitled "why i left

goldman sachs." he joins me right now. why did you write this book? >> i wrote this book because after the op-ed, i got more than 4,000 messages. i'd say more than 3/4 from people not in the financial industry. i actually saw an opportunity to write something that shows the good parts about wall street and the negative parts and really to show people that four years after the crisis and two years after dodd frank legislation, a lot of the really bad practices like banks betting with their own money without telling clients that or derivatives being completely in the dark and, you know, sophisticated investors being sold products they don't understand. a lot of this stuff is still going on and could lead us to calamity again in the future. i'm not saying that going to happen, but i saw some value in showing people in the country what actually goes on. >> you seemed like an unlikely wall streeter from the get go.

so when i was first reading the book -- you're from south africa. you began as an intern. it seemed like everything, the culture, was sort of a surprise, new to you. you sort of commented on it. it was an unlikely job for you from the get go. is that a fair statement? >> not so much. i mean, i joined wall street for maybe not the common reasons that everyone joins. i actually like stock markets. i like the idea of covering some of the smartest clients in the world. i think some people think that people only get into wall street to join the rat race. i love the rat race, by the way. i loved competing. out of the 75 people i started with in my summer internship, there were only seven of us left. being at goldman for that long was something i was very proud of. it's something

partners that behind closed doors people acknowledged that there's a problem with the culture and a problem with the ethics. i saw the system was never going to change itself. i actually saw a time to take a

moral stand. believe it or not, i actually want goldman sachs to get back to what it once was, which was a respected firm. >> when you say overcharge, i mean, can you really say overcharged, given the fact that other firms may be charging similar or it's a very competitive market and at the end of the day the market dictates the price? can you really make that claim? >> let me be clear. i worked at goldman sachs my whole career. what i say in this book is not supposed to be purely a reflection of goldman. this is -- goldman did not become worse than every other bank. in my mind, it became just like every other bank, meaning goldman used to turn away hostile takeovers. the goldman of ten years ago would not have done a deal with the government of libya and moammar gadhafi.

we're on an even playing field. everyone's a big boy. we're all sophisticated investors. i guarantee you the teachers retirement fund or the charity or philanthropy is not coming to goldman expecting to get ripped off. they're looking for advice and a good product. >> why did they go to goldman then? if you could sit here and say all these things are, you know, not putting clients first and they've got, you know, all of these practices that are hurting investors, then why is goldman the top firm on the street? >> because goldman is no doubt the smartest firm on the street. when a pension fund or mutual fund needs advice or resources, they're going to come to the smartest person out there. your question about, isn't this a market and clients have choice, the truth is clients don't have much choice. there's not a lot of competition out there. clients have to do their business somewhere. my point is, if you want to be a hedge fund, say you're a hedge fund. don't say our clients' interests

always come first and take government support. i actually think goldman just wanted to say, or any other firm, you know what, we're no longer for the business of serving clients' interest. we're now in the business of serving purely our own interests. i talk about a story in the book where i flew to asia and visited with one of the firm's biggest clients. he said, let me be honest with you, we don't trust you guys, we do business with you because we have to. the partner celebrates this fact. this is great news. my reaction was, if our very first principle is about trust and reputation, how are we going to survive another 140 years if this partner is just jubilant he's going to get another two rounds of bonuses? >> we reached out to goldman sachs for comment. they said the following. mr. smith's op-ed portrayed a firm that is unrecognizable to us. we took his claim seriously and conducted a thorough review of them. that review found no evidence to support his claims but did find

mr. smith appeared to be frustrated about his career and future prospects at goldman sachs. >> first question, i was surprised that the media and the public wasn't smart enough to see that the idea of calling someone a name like a muppet or going on a muppet hunt is not the problem. the problem is the reason you calmed the teachers fund a muppet, which is because they got tricked into trading a product they don't understand. so this idea of name calling is not a bad thing. let me talk about my career. as i said, i outlasted 68 of the people i started with. goldman sachs asked me to move to europe to start a brand new business. they gave me a package to start it. what i would say is there's an element of character assassination going on here where i would actually like goldman to stop denying as a problem, but instead of attacking me, why don't they actually try to repay their clients' trust? i was a young guy. i was 33 years old.

i was told by two part inner ne i was within two years of getting promote epromoted. i was told i was doing well. i wish goldman would release all the e-mails of six different partners telling me what a terrific job i was doing. >> what about that? when you left, you were making $500,000. huge amount of money. but there were many at your experience level making more. we know the salaries on wall street. some were making $2 million and $3 million. if you were on the road to promotion and you were making $2 million and $3 million, would you still have written this op-ed? >> let me tell you, and i write about this in the book. the people making $2 million and $3 million are the people that are selling toxic deals, sophisticated products to clients who don't understand the product. i talk about it in the book. i actively declined to sell certain deals that i did not think were in clients' interests. if i had chosen to sell those deals, i could have been making more money. but $500,000 is a huge amount of

money, an amount of money i was grateful for. a bonus session is a mandatory session where they ask you, what do you want to get paid, what are your career goals? i was on wall street for 12 years. i was obviously a competitive person. if you told your manager, you know what, i wanted you to demote me and pay me less money, they would think you were crazy. so i was just doing what everyone else was doing. the reason i -- >> well, they also paid for trips for you. when you first got there, you were just arriving and they were sending you on a trip, right? >> yeah, well, i was there -- they asked me to move to europe to build a new business. i talk about this in the book as well. i would go to germany, france, italy, switser lands. over and over again i would hear this message. i don't trust goldman. we're trying you to do business, and you're turning it away. >> my issue is, when i was reading the book, i thought, well, you know, the retail investor has left the market. i guess there are reasons to

believe that, you know, the practices on wall street in general could continue to be looked at and improved and improved and improved. to pin it all on goldman and to say, you know, why i left goldman sachs and, you know, drink the kool-aid for 12 years and decide it's not good anymore, now i'm going to go write a tell-all, that's what i have a problem with. >> let me be clear. this is not designed to be a tell-all. the reason i write about goldman is because i worked at goldman. i can't write about any other firm. these practices are the same at every firm. >> are they? >> absolutely. >> can you really make that blanket statement? >> well, speak to -- >> i mean, i run into people on wall street all the time. i feel like a lot of the people i run into are trying to do the right thing. to make that blanket statement, i mean, you're making some really big -- >> that was my -- my hesitation with writing the original op-ed is you're completely right. there are thousands and thousands of honest people. the majority are very honest and doing their job. my point is if you're constantly

being asked to make morally dubious decisions to succeed in these banks, if the system becomes more transparent, these people will not be compelled to make these bad decisions. i think everyone would be better off if derivatives are brought into the light of day, if prop trading was banned, and people were not asked to try to deceive their clients. one of the reasons i wrote the book is i want people to see, and i don't think a lot of people know this, but dodd frank, two years after it was passed, less than one-third has been implemented. during that time, wall street has spent more than $300 million trying to kill the very things that caused the crisis, which were derivatives, complicated securities being in the dark, and banks using their information to bet against clients. those things are still going. >> and we're still waiting for the dodd frank to be immaterial ple -- implemented. greg smith, thank you very much. next, julian robertson joins me in a cnbc exclusive. back in a moment.

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julian robertson tells me now is the time to be putting money to work in this market. even at 80 years old, he's teleitel telling me these are interesting times for any investor. >> it's kwietd an interesting time in our economy. i think the economy and some of the thing overseas are really

having a big effect on investors. i think that right now a lot of very good investors have become so frightened about what's beginning on in europe and in asia and with qe-2, qe-3, qe-et cetera, that they've kind of lost their way and are not realizing that there's still an awful lot of marvelous companies available at very reasonable prices. apple is a magnificent company and a great value at these levels. it's rare that you get a chance at having a great company at a great value. >> so when you look at this market, for example today when we see a market down 200 points and all this nervousness driving the day, would you be poised to put money into the market, buy into the selloff? >> i would buy the specific good companies that are available

now. i think that this is the perfect time for a hedge fund. because i think we know how to hedge, we can hedge. some of us may have hedged so much that we really aren't going to do well unless a real tragedy occurs economically in the world. >> do you still see the kind of liquidity and participation by investors that we have over the last, you know, two decades or so? i mean, it feels like the retail investor has left the party. is it all institutional right now? >> i think there's a lot about retail investors having left the party and maybe the retail investor in many ways has turned himself over to a hedge fund manager. i think maybe hedge funds reflect wealthy individuals as

much as anything else. >> do you think there's a lot of money on the sidelines that is poised to come back in at some point, and what would be the catalyst for that money to come back? >> a change would be catalytic. i really feel that if american industry felt that the country were being effectively managed, it might get more courage and it might go in and do a lot of investing on its own. >> do you think the election represents that kind of catalyst? will things loosen up after the election? i know you've been a supporter of mitt romney. you think he has a shot to win? >> i think he has a good shot. i'm thrilled over it. at the very worst, i think the american people know what a fine man mitt romney is and think he's acquitted himself beautifully during the campaign. i'm very hopeful he's going to get elected. >> let's talk a little about

investing today. i know you've been a listening-time holder of apple. you said moments ago you still think it represents value. why is that? because of where it's is that? because of where it is trading versus profitability? >> apple is probably around 14 to 15 times next year's earnings. it is very, very reasonable for the kind of growth you can get. >> facebook another stock or company that you have been looking at in terms of social media. what is the attraction? >> i think the attraction is the social media side of it. and even eric schmidt of googleal who was a little late to the party is a great believer in the social media. and i think it is live, well and moving ahead. i am kind of an admirer of the young fellow who heads up

facebook. >> so in terms of facebook i know you like the management and you like mark zuckerburg and what he has done. would you buy the stock? >> i don't really know enough about the stock to say that. i've sort of been lucky on that some of the younger people here that have a private investment group were very early in facebook and got in it many years ago. i'm part of their partnership so it's been -- i don't know enough about it, the pricing now. >> as sort of a student of investing and wall street for so many years were you surprised of the debacle with that ipo? company has lost 50% of its value, real sort of botched ipo from the get go. >> it really was botched up.

but in the sense it was symbolic of what hot deals had been for years. you know, there was people buying it. it is kind of a greed game. in a sense everybody gets what they deserve. >> tell me about your portfolio and how you are allocating capital today in an overall strategy. >> i'm looking around for great companies. and i have actually invested in a european air carrier. and i'm very high on ryan air. ryan air is a low cost producer in the world. it is selling at a very reasonable multiple. rolls-royce many people think of as a luxury car manufacturer.

it is a great supplier to the aero nautics and space around the world. ocwen financial just bought a large mortgage company from wilber raulz. those companies have a lot i think going for them. capital one is a fine company. i think the steels are way over valued. ak steel and u.s. steel and japanese steels are just ridiculously priced for anything except a real takeoff economy. and i don't think anybody expects the economy to explode on the upside. >> my thanks to jul yn robinson.

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welcome back. as we say good night i want to take a look at the day on wall street. triple digit decline for the dow jones industrial. you had a handful of companies

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